Liberal committee chair backs 10% superannuation freeze

The chair of the parliamentary committee on financial services has backed stalling the legislated super increase at 10 per cent after it was revealed Superannuation Minister Jane Hume described the mark as a "milestone" and a "nice round number" in private meetings with the industry.

"In that light, 10 per cent would definitely be preferable to 12," he told The Sydney Morning Herald and The Age.

The levy is legislated to rise from its current level of 9.5 per cent to 10 per cent in 2021, then to 12 per cent by 2025, an increase that will boost retirement savings by an estimated $15 billion each year.

The major super funds will also be asked to testify for the first time before the House Committee in November in the lead up to the politically charged probe. The review is being used by some members of the Coalition to argue for a stall in the legislated increase, which is due to come in just before the next election.

On Friday, a group backed by the former chair of the Productivity Commission, Peter Harris, will also call for the inquiry to examine reverse mortgaging as part of a suite of measures to boost super balances.

The World Economic Forum found in June the average Australian will run out of retirement savings 10 years before they die at the current compulsory superannuation rate of 9.5 per cent, forcing them onto the pension and increasing the tax burden for younger generations.

Household Capital, which has been targeting an expansion of the home equity sector and is backed by Mr Harris and former superannuation minister Nick Sherry, has called for the review to focus on how retirees can better access the capital locked away in their homes.

"Baby Boomers don't have enough in super and people who are retiring now need more help," said Household Capital managing director Joshua Funder.

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"The terms of reference show home equity is now considered by the government to be part of the pillars of retirement funding. There is a very big light at the end of this tunnel."

Senior figures within the industry have described the move to draw down on mortgages as "inevitable". That transition is likely to be accelerated if the compulsory superannuation rise is stalled after reaching 10 per cent in 2021.

After being asked on Wednesday about her comments at a private meeting with superannuation chiefs at the Australian Tax Office, Senator Hume said her promotion of the 10 per cent mark should not be taken as an intention to stall the increase but was an opportunity to raise superannuation financial literacy.

Association of Superannuation Funds of Australia chief executive Martin Fahy said the review was the time for "a debate we need to have".

"What is our aspiration for retirement in this country? Is it the poverty-driven retirement of grandparents or is it a world-class well-funded system," he said.